Avoiding the holiday debt blues

Have you started shopping for holiday gifts yet? Even though economists

expect consumers to spend less this holiday season because of rising gasoline

and other energy costs, that doesn't mean shoppers won't spend more than

they planned.

During the holiday season in 1999, for example, consumers spent 27 percent

more than they had planned for holiday gifts, according to the International

Mass Retail Association. Average family spending hit $1,067, with men outspending

women.

Sometimes, excess holiday spending is what pushes a financially troubled

family into bankruptcy. Despite a robust economy, personal bankruptcies

remain near their all-time high.

Here are some tips from Dennis Filangeri, a certified financial planner

in San Diego, on how to keep your holiday debt-free.

* Make a gift list and check it twice.

Don't spend so much that you regret it in 01/when the bills come

in. Determine how much you can afford to spend overall, and divide that

amount among the people for whom you want to buy gifts. You can build the

list by browsing through catalogs and store windows for ideas and prices — just hold off on buying anything.

* Stick to the list and avoid impulse buying.

You probably are familiar with the advice: Never go grocery shopping

without a list (or when you're hungry). The same advice applies to holiday

shopping. Sticking to a list reduces expensive impulse shopping, which is

typically what gets people into financial trouble.

* Track what you spend.

Inevitably, you'll buy some things on impulse. At least keep track on

your list what you've spent so that you can keep the overall spending within

limits. Like any budget, if you overspend in one area, try to underspend

in another.

* Shop early and take your time.

Starting early allows you time to shop for bargains and take advantage

of sales. People who do most of their shopping in the last minute don't

have time to shop for bargains and they are more apt to ignore their budget

and spend any amount out of desperation. If you shop on the Internet, check

out the possibilities — but sleep on it before you order.

* Leave the credit cards at home.

Credit card companies push cards around the holiday season especially,

with low introductory rates and other incentives. However, many financial

planners feel that credit cards often lead to excess spending during the

holidays (as well as the rest of the year). So take cash when you go holiday

shopping. You'll be less apt to overspend and you'll be spending money you

have.

* Be creative.

A "gift certificate" to baby-sit, clean or something else special makes

for a nice personal, but inexpensive, gift. Kids especially find this technique

useful. Baked goods and homemade crafts also are appreciated gifts. A photo

of a family gathering can be a far more cherished and lasting gift than

a new tie.

* Delay some purchases.

Perhaps you and your spouse or a close relative might agree to wait

to buy some gifts for each other until after the holidays, and concentrate

instead on the kids. This reduces your immediate expenses and you can take

advantage of the post-holiday sales.

* Watch the non-gift expenses.

With the focus on gifts, it's easy to overlook the other expenses around

the holidays. These include Christmas trees, long-distance telephone calls,

travel, wrapping paper, decorating, postage, party food, drinks and entertainment.

* Talk about a tight budget.

If the budget is tight, let the family know you won't spend as much

this year and why. Most likely they'll understand. You might combine this

with making charitable gifts to less fortunate families, such as helping

out in a soup kitchen or delivering food.

* Start saving for next year.

You can alleviate much financial stress by tucking away money each month

in a holiday fund. Start in 01/and you'll have a nice little fund by

this time next year.

* Keep your perspective.

Sure, it's nice to give generously, but keep it in perspective. The

best gift you can give your family is financial stability.

Zall, Bureaucratus columnist and a retired federal employee, is a freelance

writer based in Silver Spring, Md. He specializes in taxes, investing, business

and government workplace issues. He is a certified internal auditor and

a registered investment adviser. He can be reached at miltzall@starpower.net.